Great-West Lifetime. Not a Deposit Not FDIC Insured Not Guaranteed by Any Bank Not Insured by Any Federal Government Agency Funds May Lose Value

Transcription

1 Great-West Lifetime Advantage IRA Solution Not a Deposit Not FDIC Insured Not Guaranteed by Any Bank Not Insured by Any Federal Government Agency Funds May Lose Value

2 Great-West Lifetime Advantage IRA Solution Whether you ve been a participant in an employer-sponsored group retirement plan, are new to retirement saving, or are just exploring other retirement savings options, Great-West Lifetime Advantage IRA solution can help you create a successful savings and retirement income strategy. An individual retirement account (IRA) provides a tax-advantaged way to save and invest money for retirement. You may set aside earned income up to an annual limit set each year by the federal government ($5,000 in 2012). Individuals age 50 or older may also contribute an additional amount ($1,000 in 2012). Great-West Lifetime Advantage IRA solution is available as a traditional IRA or a Roth IRA. Both offer unparalleled service, ease of use, and flexible features. Service The IRA experts in our Retirement Resource Center are available to answer your questions from 9:00 a.m. to 7:00 p.m. Eastern time, Monday through Friday. You also can manage your account and access educational resources anytime using or by calling our voice response system at (866) In addition, you ll have access to our Reality Investing Advisory Services (Advisory Services) suite, including Managed Account, Online Investment Advice and Online Investment Guidance. Simplicity You ll find it easy to open an account, roll over assets from a qualified employer-sponsored plan or another IRA, or consolidate your retirement assets. If Great- West Retirement Services (Great- West) administered your previous employer s plan, you can roll over your assets to Great-West Lifetime Advantage IRA solution while continuing to receive the same excellent customer service, online account management tools, and user-friendly quarterly statements you enjoyed as part of your group plan. Flexibility You can choose a traditional IRA or Roth IRA (or both) to best fit your retirement income goals. You also have a choice of more than 100 investment options with a wide range of styles and objectives, from a variety of investment management companies. When you begin making withdrawals from your account, your options include full or partial withdrawals and periodic payment options. 2 Please consult with your financial advisor or call the Retirement Resource Center at (877) to speak to a retirement associate 3 1

3 Differences Between Traditional and Roth IRAs Both traditional IRAs and Roth IRAs offer tax-advantaged growth potential, and both types of IRAs are subject to annual contribution limits. However, traditional IRAs and Roth IRAs are different. Feature Traditional IRA Roth IRA Age limit on contributions Deductibility of contributions You cannot contribute after the year you reach age 70½. You may be able to deduct your contributions depending on your income, tax-filing status, eligibility for an employer-sponsored retirement plan, and whether you receive Social Security benefits. There is no age limit. You cannot deduct contributions. Tax treatment of distributions Required distributions Income limit on contributions Distributions are taxed as ordinary income, but if you made nondeductible contributions, not all of the distribution is taxable. A 10% early withdrawal penalty may apply to withdrawals made prior to age 59½. You must begin receiving required minimum distributions by April 1 of the year following the year you reach age 70½. There is no income limit. Distributions are not taxed if you have been invested in the account for at least five years and the distribution is made due to your disability, death or after you have reached age 59½. There are no required distributions if you are the original owner. For 2012, you cannot contribute if your modified adjusted gross income is over $125,000 for single and head of household filers or $183,000 for joint filers. Special limits apply if you are married but filing separately. Please see IRS Publication 590 for more details. Source: IRS Publication 590 You may contribute to both a traditional IRA and a Roth IRA in the same year. However, your combined contributions cannot exceed the annual limit set by the federal government. For more information, see IRS Publication 590 or consult a financial advisor. Please consult with your financial advisor or call the Retirement Resource Center at (877) to speak to a retirement associate 3 2

4 Funding an IRA There are several ways to consider funding an IRA: 1. Roll over money from a previous employer s retirement plan. When you leave a job and have accrued savings in your employer-sponsored qualified retirement plan, consider the following options: Roll the money into a traditional IRA You may roll over all or part of your account balance accumulated on a pre-tax basis to a traditional IRA. This provides continued tax deferral and may offer new investment choices and greater flexibility than the group plan. Roll the money into a Roth IRA A rollover of your designated Roth savings within a 401(k), 403(b), or governmental 457(b) plan to a Roth IRA is not subject to taxes. You also may be able to roll over pre-tax accumulations from a previous employer s retirement plan into a Roth IRA; however, the amount of the rollover is subject to ordinary income tax. For more information, please consult your financial advisor. 2. Consolidate your other IRAs into a single IRA. If you have questions regarding the rollover process, please call the Great-West Retirement Resource Center at (877) Start a new IRA with an initial amount (and continue contributing if you wish). Once you set up your IRA, you may contribute to your account as long as you have earned income. (If you file jointly, you or your spouse must have earned income.) With a traditional IRA, you may continue to contribute until age 70½. With a Roth IRA, you may make contributions regardless of your age; however, your contributions may be subject to income limits. For detailed information regarding contributions and other options, please see IRS Publication 590 or consult with your financial advisor. You may consolidate other IRAs into one IRA to simplify account tracking and management. When you consolidate two or more accounts into a single IRA, you increase your overall account balance, which may lower asset-based fees for certain features (a traditional IRA and a Roth IRA are treated as two separate accounts). You may be able to continue contributing to your consolidated IRA(s). 3

5 Investment Options Great-West Lifetime Advantage IRA solution provides a broad array of investment options. With more than 100 funds available, including risk-based, asset allocation portfolios, as well as a series of target date funds, you ll have a choice of investment styles and objectives from a variety of leading investment managers. Asset allocation can help you manage risk by spreading your investments among different asset classes, such as stocks, bonds and cash equivalents. While you can invest in any of Great-West Lifetime Advantage IRA solution s other investment options at the same time, selecting just one risk-based Great-West Profile Fund or one Great-West Lifetime Asset Allocation Series SM fund may be all you need or want. The investment options available to you range from conservative to aggressive. When you choose one of the Great-West Profile Funds or Great-West Lifetime funds, you get instant diversification and automatic rebalancing 4, which means that the fund s asset allocation is adjusted periodically to ensure market forces don t cause it to get off track from its intended investment objective. You should still regularly review your investment options, risk tolerance and goals, and make adjustments if your personal circumstances change. Please consult with your financial advisor or call the Retirement Resource Center at (877) to speak to a retirement associate 3 4

6 Investment Options (continued) Great-West Profile Funds The risk-based Great-West Profile Funds can be selected in correlation with your investor style, with options ranging from conservative to aggressive. The Great-West Profile Funds are professionally managed by qualified investment experts who analyze the underlying funds in each asset class quarterly, select the investment mix, monitor performance, and make adjustments annually. 5 When you choose one of these portfolios, you get instant diversification and automatic rebalancing 4 meaning that the fund is adjusted periodically if market forces cause it to get off track from its intended investment objective. You should still regularly review your investment options, risk tolerance and goals, and make adjustments if your personal circumstances change. Great-West Lifetime Asset Allocation Series SM Funds With the Great-West Lifetime Funds, you get an asset allocation strategy designed to adjust over a lifetime, providing you with a diversified mix of investments spread across multiple asset classes in a single investment option. Each Great-West Lifetime fund employs a different combination of investments among the underlying funds, gradually shifting its emphasis from more aggressive investments to more conservative ones as you approach retirement. The date in a Great-West Lifetime fund represents an approximate date when an investor would expect to start withdrawing their money. By choosing the Great-West Lifetime fund closest to your anticipated retirement date, you invest in a single fund that can help address your need for retirement readiness at all stages of life before, at, and in retirement. The principal value of the funds is not guaranteed at any time, including the target date. 5 The Great-West Lifetime funds include these core features: A lifetime investing approach 6 Expert consultation from Ibbotson Associates, Inc. A wide array of leading investment managers A blend of active and passive investment management The Great-West Lifetime funds are designed to fit all the stages of your life whether you re 20 years old or 20 years into retirement. Great-West SecureFoundation What would you say if we offered to help you secure a guarantee of retirement income for life? Great-West SecureFoundation (SecureFoundation) offers a new approach to the traditional trade-off between protecting retirement income and staying invested in growing markets because it: Protects your retirement income when the market goes down Allows you to benefit when the market goes up Provides you a retirement income for life 8 SecureFoundation is a contingent deferred annuity contract or certificate issued by Great-West Life & Annuity Insurance Company (GWL&A). The SecureFoundation contract is GWL&A s promise to provide a payment of guaranteed income subject to the terms and conditions of your contract or certificate and claims paying ability of GWL&A. SecureFoundation is only available through the purchase of a Great-West SecureFoundation fund. Great-West SecureFoundation funds are subject to the risks of their underlying funds. SecureFoundation guarantee is not available in New York, and may not be available in all states. For more information and to check availability, visit Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information, you may obtain mutual fund prospectuses, and/or additional disclosure documents including the Guarantee Disclosure Statement for Great-West SecureFoundation from your registered representative. Read them carefully before investing. Dynamic portfolios with over 20 underlying funds 7 5

7 Advisory Services Whether you choose a traditional or Roth IRA, Reality Investing Advisory Services (Advisory Services) is included with Great-West Lifetime Advantage IRA solution. Advisory Services offers strategies for retirement planning, including Managed Account, Online Investment Advice and Online Investment Guidance. Managed Account The Managed Account option is designed for the Do- It-For-Me SM Investor who prefers professional portfolio management. It provides regular account monitoring and an annual portfolio review. In addition, the customization and personalization features allow for building an IRA portfolio that considers your: Contribution rate and salary Desired retirement age and retirement income Social Security benefits estimate and other outside assets The customization components can be updated at any time and help ensure optimal portfolio design during both the accumulation and distribution phases of your life. The Managed Account service charges a fee based on your account balance. Please consult with your financial advisor or call the Retirement Resource Center at (877) to speak to a retirement associate 3 Online Investment Advice and Online Investment Guidance Online Investment Advice is for the Help-Me-Do-It SM Investor who prefers to manage his or her own account with validation from a financial expert. It provides you with a fund-specific recommendation based on the investment lineup available as part of Great-West Lifetime Advantage IRA solution. Online Investment Advice charges a flat fee that is deducted from your account on a quarterly basis. Online Investment Guidance is for the Do-It- Myself SM Investor. It s a free service that provides personalized asset allocation assistance, but not specific fund recommendations. Please see the enclosed Fees and Minimums sheet for a complete description of the fees associated with the Managed Account service and Online Investment Advice. There is no guarantee that participation in Advisory Services will result in a profit or that your account will outperform a self-managed portfolio. Please consult with your financial advisor before signing up for this service. 6

8 Access to Your IRA You can withdraw money from your IRA at any time. However, be aware of the tax consequences of each withdrawal and consult with your financial advisor for assistance. Withdrawal Options When you begin making withdrawals from either a traditional or Roth IRA, your options include: Full distribution Partial distribution Periodic withdrawals for a specified amount Periodic withdrawals for a specified number of years Substantially equal periodic payments over the owner s lifetime Loans are not available from IRAs. For detailed withdrawal and required minimum distribution rules, see IRS Publication 590. Traditional IRA You may take withdrawals without penalty from your traditional IRA after you reach age 59½. Your taxable distribution is subject to ordinary income tax, including applicable federal, state and local income tax, in the year you take the withdrawal(s). If you take a withdrawal before age 59½ from your traditional IRA, it s subject to a 10% federal early withdrawal penalty in addition to ordinary income tax. There are a few exceptions to the age 59½ rule, as stated in IRS Publication 590; or refer to your financial advisor for more details. Required Minimum Distributions You cannot keep your money in a traditional IRA indefinitely. You must begin taking Required Minimum Distributions (RMDs) from a traditional IRA by April 1 of the year following the year you turn age 70½. If you don t take an RMD, or you take a withdrawal that is not large enough to meet your RMD requirement, a 50% excise tax applies to the amount that should have been withdrawn from your account but was not, according to RMD calculations. You re also subject to ordinary income taxes on the full amount that should have been withdrawn. Roth IRA You may take withdrawals from your Roth IRA tax-free if your withdrawals meet certain requirements. As of the year of distribution, you must have been invested in the Roth IRA for a minimum of five years and the distribution must be made in one of the following situations: After you reach age 59½ Because you are disabled To a beneficiary or to your estate after your death When it is used for a first-time home purchase (subject to limitations) If a distribution does not meet the requirements listed above, the portion of the distribution attributable to earnings may be subject to ordinary income tax and may be subject to the 10% early withdrawal penalty. If you re the original owner of a Roth IRA, you don t have to take distributions, regardless of your age. For more information, please see IRS Publication 590. Please consult with your financial advisor or call the Retirement Resource Center at (877) to speak to a retirement associate 3 7

9 Getting started How do I set up Great-West Lifetime Advantage IRA solution? Apply online at 1 You may also complete the enclosed application form and fax or mail it in. What is the minimum amount required to open Great-West Lifetime Advantage IRA solution? You will need to make an initial investment of $500 or roll over assets from your previous employer s retirement plan or your current IRA. How do I complete a rollover from my retirement plan into Great-West Lifetime Advantage IRA solution? Complete the IRA application form and then complete the required distribution forms from your previous employer s plan or current IRA to initiate the rollover. If you have questions regarding the process, please call the Retirement Resource Center at (877) Where do I find information on my investment options? Please see the enclosed Investment Options at a Glance for a summary of your options. Fund overviews, values, performance and online prospectuses are available at Can I continue to make contributions after my initial rollover? You may make contributions that fall within the IRS limits (as described in the Disclosure Statement on Great-West Lifetime Advantage IRA solution application). Your contributions to a traditional IRA may be tax-deductible. How do I monitor and manage my Great-West Lifetime Advantage IRA solution? You can track your account through your quarterly statement, review your account and make changes online at 1, or manage your account over the phone by calling the Retirement Resource Center. Once your IRA is established, you will receive a letter with the Retirement Resource Center phone number, as well as your password and Personal Identification Number 10 (PIN) for your account. What fees will I pay? Please see the enclosed Fees and Minimums sheet for a complete description of the fees associated with the administration of your account. What additional help does Great- West offer? IRA education IRA rollover assistance Investment information 11 Account management flexibility through the website at and the Retirement Resource Center Please consult with your financial advisor or call the Retirement Resource Center at (877) to speak to a retirement associate 3 8

10 1 Access to the website and voice response system may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. Transfer requests made via the website or voice response system received on business days prior to close of the New York Stock Exchange (4:00 p.m. Eastern time or earlier on some holidays or other special circumstances) will be initiated at the close of business the same day the request was received. The actual effective date of your transaction may vary depending on the investment option selected. 2 Withdrawals from a traditional IRA are subject to ordinary income tax. A 10% early withdrawal penalty may apply to withdrawals made prior to age 59½. 3 The Retirement Resource Center is available Monday through Friday from 9:00 a.m. to 6:00 p.m. Eastern time. While our representatives are able to explain the options to you, they cannot tell you which option is best for you. Our Retirement Resource associates will not provide tax or legal advice. Please consult with your accountant and/or tax advisor before making your decision. 4 Diversification and rebalancing of an investment portfolio do not ensure a profit and do not protect against loss in declining markets. 5 Asset allocation funds may be subject to a fund operating expense at the fund level, as well as prorated fund operating expenses of each underlying fund in which they invest. For more information, please refer to the fund prospectus. 6 Asset allocation is designed to help with retirement readiness up to, through, and beyond the actual target retirement date or other targeted funding need. 7 Great-West Lifetime Asset Allocation Series includes funds managed by Great-West Capital Management, LLC (GWCM), investment managers retained by GWCM, and unaffiliated third-party fund managers. 8 Excess Withdrawals can deplete the Fund Value and affect your potential guarantee. 9 In some states, the Great-West SecureFoundation product is an insurance contract. This product may not be available in all states. 10 The account owner is responsible for keeping the assigned PIN confidential. Please contact Great-West Financial immediately if you suspect any unauthorized use. 11 Representatives of GWFS Equities, Inc. are not registered investment advisers and cannot give legal, tax or investment advice. Consult with your financial planner, attorney and/or tax advisor as needed. The principal underwriter of Great-West Funds Inc. is GWFS Equities, Inc., and securities, when offered, are offered through GWFS Equities, Inc. and/or other broker dealers. This contract is offered through a group fixed deferred annuity certificate (or individual fixed deferred annuity contract in certain states) issued by Great-West Life & Annuity Insurance Company, Greenwood Village, CO (Form GLWB-IRA series). Great-West Life & Annuity Insurance Company is not licensed to do business in New York. This certificate/contract may not be available in all states. Great-West Funds, Inc. and Great-West Capital Management, LLC are subsidiaries and GWFS Equities, Inc., member FINRA/SIPC, is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company and each is an affiliate of Great-West Life & Annuity Insurance Company of New York, White Plains, New York. Great-West SecureFoundation guarantee is not available in New York and may not be available in all states. Please check with your advisor or Great-West representative for more information. Great-West Financial SM refers to products and services provided by Great-West Life & Annuity Insurance Company; Great-West Life & Annuity Insurance Company of New York, White Plains, New York; their subsidiaries and affiliates. Great-West Life & Annuity Insurance Company is not licensed to conduct business in New York. Insurance products and related services are sold in New York by its subsidiary, Great-West Life & Annuity Insurance Company of New York. The trademarks, logos, service marks, and design elements used are owned by Great-West Life & Annuity Insurance Company. Great-West Retirement Services refers to products and services provided by Great-West Life & Annuity Insurance Company, FASCore, LLC (FASCore Administrators, LLC in California), Great-West Life & Annuity Insurance Company of New York, White Plains, New York, and their subsidiaries and affiliates Great-West Life & Annuity Insurance Company. All rights reserved. Form# G4051PB (10/2012) PT157996